Powers Pushes to Help Small Businesses

Council member wants permanent outdoor dining and temporary repeal of commercial rent tax

| 02 Aug 2020 | 02:18

As New Yorkers continue to struggle to get by during the pandemic and businesses are barely surviving, one elected official has proposed several measures to help the economy.

Last week, Council Member Keith Powers released a report outlining further action for small businesses’ recovery and employee aid, “Open for Business: Saving Our Small Businesses Post-COVID.”

Among the many items in the report are Powers’ desire to make outdoor dining permanent and a measure to relieve businesses of paying commercial rent tax during COVID-19 State of Emergency.

“I think [outdoor dining] is working really well,” Powers told Our Town. “It’s an opportunity to make money and pay bills. It makes our streets more welcoming. If this doesn’t happen we’d see a lot more businesses be prepared to close. I think people are searching for answers and this is an opportunity to get back to normalcy.”

The commercial rent tax is 3.9 percent of businesses’ annual rent charged only to businesses south of 96th Street in Manhattan. This bill would help approximately 5,500 Manhattan businesses with an annual base rent of less than $1 million that are currently paying the tax.

“This is money back in the hands of small business owners,” Powers said. “Right now, New York City is experiencing a state of emergency and our response to help businesses recover must be commensurate. Relieving payment of the commercial rent tax at this time is a tangible benefit for businesses.”

Uncertain Future

In 2019, he introduced legislation to provide relief for up to 1,300 businesses from the commercial rent tax, in the form of expanded exemptions and sliding-scale tax credits.

According to The Center for an Urban Future’s analysis, small businesses account for 1.2 million jobs and $65.5 billion in revenue.

“Small businesses are the lifeblood of New York City and if we want them to survive in a post-COVID-19 city, we need to take action,” Powers said. “We can begin by providing financial assistance, removing regulatory hurdles, expanding existing programs and supporting targeted employment assistance.”

Before the pandemic, businesses were struggling with competition from e-commerce, rising rents, the increased cost of doing business and more. Now, businesses face an uncertain future as those costs are met with the financial struggle of a COVID-19 shutdown and a collapsing economy.

According to a Hospitality Alliance survey, only 19 percent of New York City businesses paid June rent and only 26 percent of landlords waived rent.

Some steps Powers suggested include:

Provide Emergency Rent Relief to Small Businesses: The city should utilize future federal stimulus funds to establish a new financial assistance program modeled after the Payment Protection Program to help small businesses pay rent.

Save Our Stages: Federal aid should give consideration to businesses, such as Broadway theaters and independent music venues, which cannot operate at reduced capacity and will be among the last to reopen. These “Phase 5” businesses, which have no current timeline for reopening, will be lost without extended financial assistance.

End Unnecessary Fines and Create Blanket Grace Periods: Earlier this year, the mayor axed certain fines that were outdated and costly. Powers wants to expand that list.

He wants the mayor to convene Small Business Services (SBS), Department of Consumer Affairs (DCA), Department of Sanitation (DSNY), Department of Health (DOHMH) and other agencies to establish a grace period on fines and fees.

Expand Existing Programs: When the current eviction moratorium for commercial tenants expires Aug. 20, most small businesses will still be a long way from recovery. Residential tenants experiencing hardship due to COVID-19 have been handed a lifeline by the Tenant Safe Harbor Act, but no similar relief has been extended for commercial tenants.

However, through an executive order or state legislation, the governor and state legislature should extend the eviction moratorium for commercial tenants by one year.

Cap Third-Party Fees Beyond State of Emergency: For businesses that are struggling to stay afloat during and after COVID-19, the city should extend the cap on third-party apps. The current law passed by the City Council extends it for 90 days, but Powers wants the cap extended by 120 days.

Enable Street Vendors to Take Part in the Open Streets Program: Street vendors play an important role in the city’s economy and Powers stressed they must be included in efforts to support small businesses. The Open Streets program provides an opportunity to include vendors in the plan for recovery and vision for a revitalized streetscape.

Extend Financial Assistance to Undocumented New Yorkers: Immigrants have been essentially shut out of federal relief programs, despite playing a crucial role to the local and national economy. According to the Center for an Urban Future, 95 to 100 percent of undocumented New Yorkers have been unable to access federal financial assistance.

“Small businesses are the lifeblood of New York City and if we want them to survive in a post-COVID-19 city, we need to take action.” Council Member Keith Powers